Visa is launching a platform for banks to issue fiat-backed tokens such as stablecoins and tokenized deposits, as more financial institutions and businesses express interest in how cryptocurrencies and blockchain technology can improve their operations.
The product, which will be known as the Visa Tokenized Asset Platform or VTAP, will allow banks to "mint, burn and transfer" tokens. While still in the testing stage, the plan is to go live next year, according to a Thursday statement.
Stablecoins are cryptocurrencies whose value is usually pegged to assets such as the dollar. They're used to conduct transactions and as a refuge from the often volatile price swings in tokens like bitcoin and ether.
Spanish bank BBVA has been testing the platform through the year and expects a pilot for select customers on the Ethereum blockchain at some point next year.
"Visa has been at the forefront of digital payments for nearly 60 years, and with the introduction of VTAP, we are once again setting the pace for the industry," Vanessa Colella, global head of innovation and digital partnerships at Visa, said in the statement.
Stablecoins and other fiat-backed tokens have gained in popularity, with PayPal's PYUSD and other offerings in the market. Stripe also allows merchants using its payments processing capabilities to accept stablecoins for online transactions.
"We're excited to leverage our experience with tokenization to help banks integrate blockchain technologies into their operations," Colella said.
